Chapter One-Introducing Business

Question 1

What is a business?

Answer 1

A business is an organisation that provides goods and/or services to consumers in order to make a profit.

Question 2

What are finished goods?

Answer 2

Finished goods are those that are ready for customers to buy and use.

Question 3

What is a profit?

Answer 3

A business makes a profit when the income earned (revenue) is greater than the costs of production (expenses).

Question 4

What is a For Profit Organisation?

Answer 4

An organisation who’s objective is to make a profit

Question 5

What is a Not-for-Profit Organisation?

Answer 5

And organisation who’s main objective is to provide social, educational or religious benefits.

Question 6

What is Market Share?

Answer 6

Market share refers to the business’s share of the total industry sales for a particular product.

Question 7

What is a Multinational Corporation?

Answer 7

A multinational corporation (sometimes referred to as a transnational corporation) is a company that has branches in many different countries.

Question 8

What is an objective?

Answer 8

An objective states what an organisation expects to achieve over a set period.

Question 9

What are Financial Objectives?

Answer 9

Financial objectives are objectives that organisations make in regards to profit.

Question 10

What are Social Objectives?

Answer 10

Objectives that benefit the community.

Question 11

What are Personal Objectives?

Answer 11

Objectives that the business owner tries to accomplish in their business.

Question 12

What is Economy

Answer 12

An economy is a system set up to determine what to produce, how to produce and to whom production will be distributed.

Question 13

What is Economic Growth?

Answer 13

Economic growth occurs when the real value of goods and services increases over a set period of time.

Question 14

What is GDP?

Answer 14

Stands for Gross Domestic Product, the total market value of all final goods produced by a country over a set period of time.

Question 15

What is Export?

Answer 15

The sale of goods and services to another country.

Question 16

What is Import

Answer 16

Import is buying goods and services from another country.

Question 17

What is a Business Environment?

Answer 17

The business environment refers to the surrounding conditions in which the business operates. It can be divided into two broad categories: internal and external.

Question 18

What is an Internal Environment?

Answer 18

The internal environment, sometimes called the micro environment, includes those factors over which the business has some degree of control.

Question 19

What is an External Environment?

Answer 19

The external environment includes those factors over which the business has little control. It may be further divided into two categories: operating and macro.

Question 20

What is Corporate Culture?

Answer 20

The corporate culture is a set of mostly unwritten or informal rules that spell out how people are to behave most of the time.

Question 21

What is a Policy?

Answer 21

A policy is a general guide to help employees deal with recurring situations.

Question 22

What is an Operating Environment?

Answer 22

A business’s operating environment, sometimes called the task environment, refers to the specific outside stakeholders with whom the business interacts in conducting its business.

Question 23

What is a Stakeholder?

Answer 23

A stakeholder is any group or individual who has an interest in, or is affected by, the activities of a business.

Question 24

What is a Supplier?

Answer 24

A business’s suppliers are those organisations and individuals that supply the resources that the business needs to conduct its operations.

Question 25

What is Competition?

Answer 25

Competition is rivalry among businesses that seek to satisfy a market.

Question 26

What are Competitors?

Answer 26

Competitors are businesses that offer rival products or services.

Question 27

What is a Sustainable Competitive Advantage?

Answer 27

A sustainable competitive advantage is the ability of a business to develop strategies that ensure it has an ‘edge’ over its competitors.

Question 28

What are Interest Groups?

Answer 28

Interest groups are groups of people who attempt to directly influence or persuade an organisation to adopt particular policies.

Question 29

What is a Macro Environment?

Answer 29

The macro environment is made up of the broad conditions and trends in the economy and society within which a business operates.

Question 30

What is Workplace Diversity?

Answer 30

Workplace diversity means the multitude of individual differences that exist among people in the workplace.

Question 31

What are Business Ethics?

Answer 31

Business ethics is the application of moral standards to business behaviour.

Question 32

What is Socially Responsible Management?

Answer 32

Socially responsible management is managing an organisation in such a way that the broader social welfare of the community is taken into consideration when making business decisions.

Question 33

What are Stakeholders?

Answer 33

Stakeholders are individuals or groups with an interest in the success of the business.

Question 34

What is a Conflict of Interest?

Answer 34

Conflict of interest occurs when a person takes advantage of a situation or piece of information for his or her own gain rather than for the employer’s interests.

Question 35

What is Corruption?

Answer 35

Corruption is a lack of honesty or integrity; using a position of trust or authority to receive favours, often financial bribes.

Question 36

What is a Code of Conduct?

Answer 36

A code of conduct is a set of ethical standards by which managers and employees should abide.